China's Relentless Japanification
Decades of stagnation ... at best ... await.
Japanification is perhaps the best one word long term prognosis I’ve seen of China’s demographic/economic troubles.
China’s housing market is reportedly overbuilt by 100m units, a figure I recall from the quite cautious Bloomberg, while Peter Zeihan indicates it might be as much as one billion excess units, gleaned from final numbers from a prestigious government statistics tracking organization … just prior to China ceasing to publish such information. The 10% overbuild should be compared to our subprime crisis in 2008, which involved just 3% to 5% of total housing.
China has a similar problem to Florida - their municipalities depend on revenue from land sales, while Florida has no income tax and depends entirely on property tax. China’s overall housing market is crashing, while Florida’s insurance sector is doing the same. China has been rearranging deck chairs on their sinking ship, but the only real solution ever proposed for their economy is growing internal consumption, which does not jibe with the CCP’s world view.
Citizens are very limited in what sort of savings vehicles they can access, so their housing market has also been the collective piggy bank. Demographically there was a reckoning circa 2019, wherein the statistical method of determining the count of children for the sake of building schools was found to be inflated by roughly 100 million. China is a nation which has bungled its primary personal savings vehicle and hallucinated a new generation of consumers/workers.
A society’s inflation can be treated by its central bank. Japan demonstrated that deflation due to demographics can not be escaped, it must simply run its course before things can begin to improve.